THE GRAY MARKET: Part 1 - Demographics
The fastest growing age segment in the United States today is people 65 years and older. Currently there are nearly thirty-five million Americans in this group and they account for roughly 13% of the total population. By comparison, in 1900 there were only three million Americans over the age of 65, representing only 4% of the population. Today’s senior citizens are living longer, healthier, better educated and more active lives than any other previous generation.
Contrary to popular belief, the gray market is also very wealthy. According to the latest Survey of Consumer Finances, conducted by the U.S. Federal Reserve, the collective net worth (assets such real estate, stocks, bonds, etc. minus liabilities) of households headed by Adults 65+ is estimated at $8.42 trillion, accounting for 29% of all U.S. household income.
The population of the elderly is expected to explode in the near future. The reasons are twofold: Americans are living longer and the life expectancy in the U.S. is at an all-time high of 77 years (by comparison, the life expectancy a century ago was 47).
The first of the seventy-five million baby boomers will turn 65 in 2011. The Census Bureau projects that the number of Americans over the age of 65 will double within thirty years, and the population of Americans over the age of 85 will triple. By the year 2050, 4.8% of all Americans (or 19.4 million) will be over 85 years of age, compared to only 1.6% today (or 4.3 million).
While issues regarding the elderly (such as social security and health insurance) remain highly debated topics between political candidates this election year, many marketers, advertisers and TV programmers have largely ignored this age group.
A recent report by the government’s Administration on Aging, revealed certain characteristics of older Americans:
Gender: There are far more elderly women in the country than men (women have a longer life expectancy) - 58.4% of the population over the age of 65 is female and 69.9% of the population over the age of 85 is female.
Marital Status: Older men are far more likely to be married (75%), than older women (43%). In fact, more elderly women are widowed (45%) than married. Only 15% of men are widowed. There are 4 times as many widows (8.4 million) than widowers (2.0 million). The remaining elderly are either divorced or never married.
Living Arrangements: Again because females live longer, a majority of elderly men live with their spouse (73%) than live alone (17%). The remaining live with either relatives or non-relatives. Conversely, elderly women are just as likely to live with their spouse than live alone (both at 41%). According to the study, 17% of elderly women live with other relatives. Almost 20% of all persons older than 85 live in nursing homes.
Ethnicity: 84% of Americans 65+ are non-Hispanic white, followed by non-Hispanic African-Africans (8%), Hispanics (6%) and non-Hispanic Asian-Amer